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Fuller v. First Franklin Financial Corp.

California Court of Appeals, Third District, Butte

June 24, 2013

MICHAEL FULLER et al., Plaintiffs and Appellants,
v.
FIRST FRANKLIN FINANCIAL CORPORATION et al., Defendants and Respondents.

Unmodifed Opn. and 5/29/31 pub. order attached.

Filed 5/1/13

APPEAL from judgments of dismissal of the Superior Court of Butte County No. 152324, Sandra L. McLean, Judge.

United Law Center, John S. Sargentis, Stephan J. Foondos and Janet S. Manrique for Plaintiffs and Appellants.

Wolfe & Wyman, Brian H. Gunn, W. Brian Jones and Marcus T. Brown for Defendants and Respondents First Franklin Financial Corporation and Bank of America.

Hansen, Kohls, Sommer & Jacob, Jason J. Sommer and Jeffrey J.A. Hinrichsen for Defendant and Respondent Sacramento First Mortgage.

ORDER MODIFYING OPINION AND DENYING PETITION FOR REHEARING

THE COURT:

The nonpublished opinion in the above-entitled matter filed on May 1, 2013, was ordered in the Official Reports on May 29, 2013. For good cause it now appears that the opinion should be modified in the following particulars and it is so ordered.

1. On page 13 of the slip opinion, second full paragraph that begins “First Franklin contends”, omit the last three sentences of the paragraph (e.g., beginning with “All three of these arguments entirely... ” and ending with “We therefore reject these grounds....”) and replace them with the following, including at the end of the last sentence a new, final footnote 8:

This is true with respect to plaintiffs’ theories of negligence and breach of fiduciary duty. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514 [party to contract cannot be liable for conspiring to interfere with it because no duty to refrain from interference]; Doctors’ Co. v. Superior Court (1989) 49 Cal.3d 39, 44 [noninsurer defendants cannot be liable for conspiring to breach duty of good faith because that duty is owed only by insurer]; Chavers v. Gatke Corp. (2003) 107 Cal.App.4th 606, 614 [no duty to plaintiffs, so defendant cannot be liable under a conspiracy theory for negligence or strict liability]; Everest Investors 8 v. Whitehall Real Estate Limited Partnership XI (2002) 100 Cal.App.4th 1102, 1107 [no conspiracy liability where no fiduciary duty owed to plaintiff].)

However, all three of these arguments entirely disregard the allegations that First Franklin conspired with SMF—plaintiffs’ broker—to deceive plaintiffs. As a federal trial court has noted in distinguishing the principle derived from these cases, “everyone owes a duty not to commit an intentional tort against anyone.” (Qwest Communs. Corp. v. Weisz (S.D. Cal. 2003) 278 F.Supp.2d 1188, 1193, fn. 4 [conspiracy liability proper for defrauding creditor].) Thus, there can be liability for conspiring to commit an intentional tort even absent any duty. (Kesmodel v. Rand (2004) 119 Cal.App.4th 1128, 1141 [false arrest/imprisonment]; Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003) 107 Cal.App.4th 54, 84 [duty to refrain from injuring plaintiff through express misrepresentations].) Indeed, in Chavers, the defendant did not challenge an instruction on a theory of conspiracy with respect to theories of concealment and intentional misrepresentation. (See Chavers v. Gatke Corp., supra, 107 Cal.App.4th at p. 611.) Thus, under this theory, First Franklin can be liable for SMF’s intentionally tortious conduct. We therefore reject these grounds for sustaining the demurrer as to the theory of deceit.[8]

[8] Because a demurrer lies only as to an entire complaint or a count (5 Witkin, supra, Pleading, § 957, p. 371), and we have upheld First Franklin’s liability to plaintiffs on a conspiracy theory for deceit, we do not need to consider First Franklin’s arguments in its petition for rehearing regarding vicarious liability on an agency theory.

2. On page 14 of the slip opinion, in the first sentence of the Disposition, after the words “First Franklin” insert the following parenthetical: “(as to the counts of deceit and UCL violations)” so that the sentence now reads:

The judgments of dismissal are reversed with directions to enter orders overruling the demurrers of First Franklin (as to the counts of deceit and UCL violations) and SFM.

The petition for rehearing of respondents First Franklin Financial Corporation and Bank of America is denied. There is no change in judgment. (.)

ROBIE, Acting P. J., BUTZ, J., DUARTE, ...


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